Monday, September 19, 2016

Artificial Intelligence: Is This The Future of Market Research and Consumer Insights?

We already know how artificial intelligence has been affecting marketing, with everyone from Netflix to Under Armor utilizing data to improve customer experience, but how exactly can market researchers hope to use AI? And apart from all those hip and trendy businesses using it that we hear about – are there really any implications for non-tech related companies?

Artificial intelligence indeed has implications for market researchers in every industry to predict shopper behaviors such as: what and how much customers will buy, what they will pay and how they will engage (customer retention) once they’ve purchased a company’s products. Roger Perowne wrote in ResearchLive this month: “(We need) Technology targeted at understanding how and why we make choices and decisions, not just navigating us to a shopping aisle.” Well that technology is here and it’s artificial intelligence. The beauty of AI is that it gives us so much more than purchase data from brick and mortar and online stores but can incorporate shopper intent, regional patterns, comparative data from other industries and more. Here are a few examples where AI is being used for consumer insights.

Improving Customer Engagement with AI
Insurer and finance company United Services Automobile Association (USAA) uses an AI product built by Intel’s Saffron that matches patterns of consumer behavior to predict how customers might contact them, and about what products they will have inquiries about. This allows USAA to plan customer service staffing as well as be more personalized in their communications – leading to cost savings for them and better experiences for their customers. 
 
AI's not just about science fiction and robots. Photo: Ryan McGuire

Predicting Consumer Demand with AI Sales Forecasting
Analyst Greg Maczka had this to say on Quora about the future of qualitative research and product development: “AI will have a much greater impact on actual, real life analysis which will eliminate the need to set up elaborate and unrealistic testing situations in the first place. And that'll be the future of market research.” The company easyJet is already in that future, with predictive analytics helping them plan flight destinations and times as well as the food and drink items they serve on their flights. Their Head of Data Science Alberto Ray-Villaverde spoke with Future Travel Experience early this year: “According to Villaverde, the difference between analytics and AI is that the former has been about diagnostic capability and looking backwards, whereas the latter is focused on predictive capability, which can help organisations better understand and plan for the future.”

Price optimization Using Machine Learning
Companies such as Vendo, Daisy Intelligence, Fractal Analytics and Blue Yonder have begun to apply artificial intelligence to pricing. What exactly does dynamic pricing software do? Here’s a description of what Blue Yonder’s software does: “monitor(s) internal (sales history, real-time demand) and external data (weather, public holidays, school holidays, competitor pricing) leading to the optimal price point for any product… continuously tests and measures the response to price changes by analyzing interactions between that price change and subsequent changes in demand.”

Airbnb began to use machine intelligence when they realized what a difficult time their customers – typically amateurs in such matters – were having figuring out how much to charge to rent their homes. Airbnb created their own in-house software tool which offers their customers a very unique form of dynamic pricing, offering them pricing tips based on changing market conditions as well as custom pricing based on the various characteristics of their listings. You can read the very interesting story of how they designed and tweaked their internal AI pricing software here.

So there you have it, artificial intelligence is no longer science fiction, and it’s not just something reserved for trendy Silicon Valley companies. AI is on a mission to clear out the error-prone focus groups and disjointed data to bring real-time, relevant insights to market researchers and marketers.

If you're interested in this and other technology innovations in the market research industry, don't miss the world's leading market research event TMRE happening in beautiful Boca Raton, Florida October 17-20. Got any comments on this blog? Make yourself heard - Tweet to us at @TMRE!

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